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Major Hospice Payment Change

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The Centers for Medicare & Medicaid Services (CMS) announced their final rule on the FY2016 Hospice Wage Index at the end of July. It included some major changes in the way hospice providers are going to be reimbursed.

The new payment system was originally supposed to go into effect this October, but now it’s been pushed back to January 2016. The extended deadline is going to give hospice providers extra time so they can update their payment systems and software as needed to accommodate the new changes. There are two major areas affected by the new CMS rule: routine home care rates and service intensity add-on (SIA) payments.

Better Rates for the First 60 Days

The CMS rule is putting into effect two rates for routine home care. The current rate for Medicare-certified providers was about $160 per-day reimbursement for patients in routine home care (RHC). The new policy is going to bump up the payment to $185 a day for RHC but only for the first 60 days. After the first 60 days, the reimbursement is going to move to a lower rate of $145 beginning on day 61. The National Hospice and Palliative Care Organization (NHPCO) issued a statement saying that it supports the two-tiered payment model.

Addressing Higher Costs at the End of Life

Also going into effect on January 1, 2016: adjustments to the SIA payment. SIA supports the resource-intensive care that patients receive from RNs or social workers in the last week of life. The new SIA payment is going to be equal to the continuous home care hourly rate, multiplied by the amount of direct patient care provided by an RN or social worker for up to a total of four hours per day.

(Continuous Home Care Hourly Rate) x (Care Provided by RN or Social Worker)  =  New SIA Payment

Up to 4 hours per day

This change in the SIA payment was created to help minimize the higher costs incurred during short lengths of stay. National Home Care and Hospice organization (NAHC) President, Val Halamandaris, expressed his concern that any payment system changes might deny patients equal access to services they need based on their place of residence. He wants to make sure that the new SIA payment amount is adequate.

The final CMS rule also set an overall increase of 1.1%. This means that hospices will be able to take advantage of a $160 million increase in Medicare reimbursements for the 2016 fiscal year.

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